RBI conducted a two-day VRRR auction, receiving bids worth ₹559.44 billion against a notified ₹500 billion. It accepted ₹500.17 billion, making a partial allotment of 87.36% at a cut-off rate of 5.49%. The move reflects RBI’s cautious liquidity management and focus on monetary stability.
The Reserve Bank of India (RBI) announced the results of its latest two-day Variable Rate Reverse Repo (VRRR) auction, a key liquidity management tool. The auction drew strong market interest, with bids exceeding the notified amount.
Key highlights of the update:
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RBI received ₹559.44 billion worth of bids against the notified ₹500 billion, reflecting robust demand from banks.
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The central bank accepted ₹500.17 billion, making a partial allotment of 87.36% at the cut-off rate.
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The cut-off rate was set at 5.49%, with the weighted average rate also at 5.49%, indicating tight liquidity conditions.
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Analysts note that the partial allotment signals RBI’s intent to balance liquidity absorption while maintaining stability in short-term rates.
The auction outcome underscores the RBI’s cautious approach amid evolving macroeconomic conditions, ensuring liquidity remains aligned with monetary policy objectives.
This real-time development highlights the RBI’s proactive stance in managing liquidity, with the VRRR auction serving as a critical instrument to fine-tune money market operations.
Sources: Reuters, Economic Times, Business Standard